China's Xiaomi to use smartphone chips designed in-house in H2 -source

HONG KONG (Reuters) - China's most valuable start-up Xiaomi Inc [XTC.UL] is aiming to use smartphone processor chips designed in-house in some of its lower-priced handsets in the second half of this year, a source with direct knowledge of the matter told Reuters on Friday.

The move would mark the first time that Xiaomi has used chips designed in-house, something analysts have said could disrupt the global chip industry and put pressure on leaders like Qualcomm Inc <QCOM.O> and MediaTek Inc <2454.TW>, which supply the Chinese smartphone maker.

The in-house smartphone application processor chip is designed for Xiaomi's mid-to-low priced smartphone model RedMi Note series, but it is unclear how many such chips Xiaomi is planning to make this year, said the source, who declined to be named because the information is not public.

Beijing-based Xiaomi declined to comment when contacted by Reuters on Friday.